Business Monitor International (BMI)'s special report "Japan Earthquake: Global Implications"examines the consequences of the March 11, 2011, earthquake on the Japanese and global economies. The report also analyses the impact of the crisis on key industrial sectors, including infrastructure, shipping, automotives, oil & gas, and agriculture.
BMI's report asserts that the aftermath of the earthquake and the nuclear crisis represent major shocks to the global economy, especially because they have coincided with unprecedented political upheaval in the Middle East and North Africa. The report examines the impact on global commodity prices and on the most affected countries in the Asia-Pacific region.
- Between 3-5% will be knocked off Japan's GDP by the March 11th earthquake and subsequent nuclear crisis, although reconstruction efforts will subsequently boost economic activity.
- Extra fiscal spending may well bring forward an eventual fiscal crisis. Japan already has the world's highest public debt burden, in excess of 200% of GDP, but the government will prioritise spending over deficit reduction.
- Construction will receive a boost, while other industries are likely to suffer for a significant period of time. Shipping, automotives, manufacturing and agriculture are likely to be worst affected. Disruption will in turn negatively affect global supply chains.
- The nuclear crisis will prompt a reassessment of the wisdom and risks of using nuclear power, not just in Japan, but worldwide.
- Several Asia-Pacific states stand to incur economic costs as a result of the earthquake,Japan is a major investor and aid donor in South East Asia and these funds could now be redirected homeward for reconstruction.